Calculate the present value of an $80,000, 10%, five- year bond that pays $8,000 ($80,000 × 10%) interest annually, if the market rate of interest is 10%.
Q: Fingen's 11-year, $1,000 par value bonds pay 11 percent interest annually. The market price of the…
A: Time Duration = 11 years Par Value = $1,000 Coupon Rate = 11% Market price = $1,110 The required…
Q: A 1,500-bond which will mature in 10 years and with a bond rate of 15% payable annually is to be…
A: Par value = 1500 Years to maturity = 10 Years Coupon rate = 15% Coupon amount = 1500*0.15 = 225…
Q: A bond has a face value of 2,000 $ is redeemable in 8 years, and pays interest of 200 $ at the end…
A: A bond is borrowing security that is issued by the company in order to raise funds from the market…
Q: Use the following tables to calculate the present value of a $487,000 @ 5%, 5-year bond that pays…
A: Present Value of bond is calculated by the present value of annual interest payment and present…
Q: A $3,500,000 issue of a 30-year bond, redeemable at par, offers 9.00% coupons payable semi-annually.…
A: The question is based on the concept of Financial Accounting.
Q: gage bond issued by Automation Engineering is for sale for $8,900. The bond has a face value of…
A: Face value =10000 Market price =8900 Coupon =5% MATURITY =9 years Could =500 Annual
Q: What is the yield to maturity for a seven-year bond that pays 11% interest on a $1000 face value…
A: Calculation of yield to maturity (YTM): Excel spread sheet:
Q: An 8 year , $10,000 bond paying a coupon rate of 5.50% compounded semi-annually was purchased at…
A: Using the rate function for YTM calculation
Q: A 7 year bond costs $30,000 and will pay a total of $3,600 in interest over its lifetime. What is…
A: Simple interest (I) = P * R * T where P = Principle / Base amount R = rate of interest T = Time R…
Q: A total amount of money worth $50,000 bond with rate of 8% annually pays dividend quarterly is…
A: We need to use the concept of the time value of money (TVM). According to the concept of TVM, the…
Q: A 10-year, P20,000 bond was issued at a nominal interest rate of 8% with semiannual compounding.…
A: A bond is investment security issued by large business entities and governments to raise borrowing…
Q: A $100 bond, paying interest at 9.5 percent, redeemable at par in 10 years find the value of bond if…
A: The term bonds refer to the debt instruments that are issued with a motive to raise debt from the…
Q: A bond with a face value of $2,000 pays half-yearly interest at a rate of 8% pa compounded…
A: Bond compounding semi-annually: In this case, the bond has a face value of $ 2000 that pays…
Q: A $3,000,000 issue of a 30-year bond, redeemable at par, offers 7.00% coupons payable semi-annually.…
A: Bond value is the present value of all the expected cash flow a bond will generate if held till…
Q: Determine the market price of a $700,000, eight-year, 12% (pays interest semiannually) bond issue…
A: Details given in the question are as follows : Face value of bond = $700000 Time period = 8 years…
Q: What is the present worth of a $10000 bond that has an interest of 20% per year payable…
A: The bond is fixed-income security issued by the company to raise funds. The present worth of a bond…
Q: Compute the present value for each of the following bonds: a. Priced at the end of its fifth year, a…
A: A bond is a financial instrument issued by large business organizations and governments to raise…
Q: A $3000 bond that pays 9%semi-annually is redeemable at par in 15 years. Calculate the purchase…
A: Solution:- We know, the purchase price of bond is the present value of amounts receivable from the…
Q: A bond pays dividends of $110 at the end of each year. If the bond matures in 20 years, what is the…
A: Annual dividends (D) = $110 Duration (n) = 20 years Interest rate (r) = 12% Bond price = 1546 Let…
Q: A municipal bond with a face value of $10,000 and bond interest rate of 8% per year payable…
A: Given, The face value of the bond is $10,000 Interest rate 8% Yield is 12%
Q: A $15,000, 5.5% bond is purchased 10.5 years before maturity to yield 8% compounded annually. If the…
A: Bond is a debt instrument issued by companies and government. It is a fixed income instrument which…
Q: A company issues a $100,000 bond due in 4 years paying 7 percent interest annually at year- end.…
A: We require to calculate the present value of bond in this question. We can calculate the present…
Q: nd pays dividends of $110 at the end of each year. If the bond matures in 20 years, what is the face…
A: In this we need to calculate the face value of bond.
Q: A P1,000 bond which mature in 10 years and with a bond rate of 5% payable annually is to be redeemed…
A: Par value = P1000 Coupon rate = 5% Coupon amount = 1000*0.05 = P50 Years to maturity = 10 Years Bond…
Q: A 50,000$ bond has a maturity date of 6 years. the bond interest rate is 6% per annum payable…
A: Bonds are the liabilities of the company which is issued to raise the funds required to finance the…
Q: Compute the present value for each of the following bonds a. Priced at the end of its fifth year, a…
A: To Find: Present Value of Bonds
Q: Compute the specified quantity.A 4-year bond costs $20,000 and will pay a total of $2,800 in…
A: The total amount of interest is $2,800.The cost of bond is $20,000.Number of years is 4.The annual…
Q: What is its annual interest rate r (as a percent)?
A: A bond is a debt instrument with which a shareholder credits cash to an entity, which can be a…
Q: Determine the present worth if the bond pays 12% compounded annually?
A: The present worth can be found using the PV Function in excel. PV = (RATE, NPER, -PMT, -FV, 0) RATE…
Q: Assume a $1000 bond issue at the rate of 10% for 15 years. a)What is the interest payment for this…
A: Bond carry annual payment which are paid during the life of bonds.
Q: A 25,000 5% bond with coupons payable semi-annually is redeemable at 97% at the end of 10 years. If…
A: Par value = 25000 Coupon rate = 5% Coupon amount = 25000*0.05/2 = 625 Redeemable price = 25000*0.97…
Q: calculate the present value of a $375,000 @ 5%, 5-year bond that pays $18,750 interest annually, if…
A: Information provided: Face value = $375000 Time to maturity = 5-year Market interest rate = 10%…
Q: Determine the market price of a $485,000, 10-year, 8% (pays interest semiannually) bond issue sold…
A: The Market price of bond issue shall be calculated by adding the present value of the total payments…
Q: Compute the selling price of 10%, 15-year bonds with a par value of $240,000 and semiannual interest…
A: Bond: It can be defined as a financial instrument of indebtedness that reflects a loan made by the…
Q: - A 10-year, P20,000 bond was issued at a nominal interest rate of 8% with semiannual compounding-…
A: The Price of the bond refers to the present value of the coupon cash flows and the maturity value.…
Q: Company 'A' issues a bond at $1,000 and offers a payment of $50/year every year for 3 years. If the…
A: Current yield of the bond can be calculated by using the online financial calculator. Current market…
Q: Calculate the Macaulay duration of an 8 percent, $1,000 par bond that matures in four years if the…
A: Modified duration = Duration / (1 + Ytm / n)
Q: A 10-year $1,000 bond pays a nominal rate of9% compounded semi-annually. If the market interest rate…
A: If the cash flows are adjusted for the inflation then they are known as cash flows in constant…
Q: A $10,000 bond (face value) with 76 interest payable quarterly is purchased for $7000. If the bond…
A: The return (whether it is a loss or gain) on a investment for a particular period of time span is…
Q: A Php 50,000 bond with rate of 8% annually pays dividend quarterly is redeemable at par at the end…
A:
Q: The market price of an $960000, ten-year, 12% (pays interest semiannually) bond issue sold to yield…
A: The market price of a bond can be computed by adding the present value of all the coupon receipts…
Q: Johnson Corporation plans to obtain financing with a $1,000,000 bond issue that has a term of 10…
A: Given, Face Value = $1,000,000 years = 10 Coupon Rate =7% Semi annual bond
Q: • What is the value of a 6%, 10-year bond with a redemption value of $20,000 that pays dividends…
A: The value for the bonds would be considered on the basis of interest rate that is being compounded…
Q: On January 1, 2020 HH Company wanted to purchase a 2,000 10-year bonds with a denomination of P1,000…
A: Bond Price Bond price is present value of the probable future cash flows. Future cash flow consists…
Q: Fitzgerald's 15-year bonds pay 6 percent interest annually on a $1,000 par value. If the bonds…
A: Here, To Find: Yield to maturity of bonds annually and semi-annually and the difference between the…
Q: A 6 year bond costs $3,000 and will pay a total of $200 interest over its lifetime. What is its…
A: Simple interest refers to interest that is just applied to the principal sum of money. The interest…
Q: What is the approximate yield to maturity for a $1,000 par value bond selling for $1,120 that…
A: Yield to Maturity: The yield to maturity (YTM) of a bond is the overall rate of return that the bond…
Step by step
Solved in 2 steps
- 2. A 10-year, P20,000 bond was issued at a nominal interest rate of 8% with semiannual compounding. Just after the fourth interest payment, the bond will be sold. Assume that an effective interest rate of 10 % % will apply, and calculate the price of the bond.Compute the specified quantity. A 7 year bond costs $30,000 and will pay a total of $2,000 in interest over its lifetime. What is its annual interest rate r (as a percent)? (Round your answer to three decimal places.) r =Determine the market price of a $485,000, 10-year, 8% (pays interest semiannually) bond issue sold to yield an effective rate of 10%. What is the market price?
- Assume a $1000 bond issue at the rate of 10% for 15 years. a)What is the interest payment for this bond annually b)What is the interest payment on semi-annually c)How much should the investors pay for this bond i.e. the valueUse the following tables to calculate the present value of a $789,000 @ 6%, 6-year bond that pays $47,340 interest annually, if the market rate of interest is 7%. Round to the nearest dollar.2. DEF Company will issue $8,000,000 in 10%, 10-year bonds when the market rate of interest is 7%. Interest is paid semiannually. Required: a. Will this interest structure result in a Premium for DEF company or a Discount? b. How much cash will be received from the issuance of the bond? c. How much will the semi-annual interest payment be on the bond?
- A $1000, 8.5% bond with interest payable annually is purchased six years before maturity to yield 10.5% compounded annually. Compute the premium or discount and the purchase price, and construct the appropriate bond schedule. Please show calculationsCompute the specified quantity. A 7 year bond costs $30,000 and will pay a total of $3,600 in interest over its lifetime. What is its annual interest rate r (as a percent)? (Round your answer to three decimal places.)A bond pays $50,000 per year and has a face value of $500,000 at theend of 8 years when it has to be redeemed. If its current discounted priceis $390,000, what true interest could be earned on the bond? Ans. (14.9%)
- A $3000, 7.5% bond (payable semi-annually) is redeemable at par in 2 years and 6 months. If the bond is purchased to yield 8.1% compounded semi-annually, determine the purchase price of the bond. Draw a timeline in your notes to help you practice!A 20-year bond with a face value of P 5,000 is offered for sale at P 3,800. The nominal rate of interest on the bond is 7%, paid semi-annually. This bond is now 8 years old (i.e., the owner has received 16 semiannual interest payments). If the bond is purchased for P 3,800, What effective annual rate of interest would be realized on this investment opportunity?Use the following tables to calculate the present value of a $502,000, 5%, 5-year bond that pays $25,100 ($502,000 × 5%) interest annually, if the market rate of interest is 10%. Present Value of $1 at Compound Interest Periods 5% 6% 7% 10% 1 0.95238 0.94340 0.93458 0.90909 2 0.90703 0.89000 0.87344 0.82645 3 0.86384 0.83962 0.81630 0.75131 4 0.82270 0.79209 0.76290 0.68301 5 0.78353 0.74726 0.71299 0.62092 6 0.74622 0.70496 0.66634 0.56447 7 0.71068 0.66506 0.62275 0.51316 8 0.67684 0.62741 0.58201 0.46651 9 0.64461 0.59190 0.54393 0.42410 10 0.61391 0.55839 0.50835 0.38554 Present Value of Annuity of $1 at Compound Interest Periods 5% 6% 7% 10% 1 0.95238 0.94340 0.93458 0.90909 2 1.85941 1.83339 1.80802 1.73554 3 2.72325 2.67301 2.62432 2.48685 4 3.54595 3.46511 3.38721 3.16987 5…
